There is much ballyhoo made about the US dollar being backed by nothing but faith. While it is true there is no material resource, gold, silver or the like acting as backing. This does not mean it has no backing at all, only that it not resource based. The truth as is so often the case is stranger than the fiction. Fiat currencies in general are backed by the governments ability to tax it's citizenry in the future. This is partially true for the US dollar, but the dollar has another backing, oil. As I said a resource does not directly back it. Meaning you can not go to your local bank and trade your dollars directly for oil. What we did was much more insidious, and far less noticeable to the everyday person. The US made deals with the opec nations to only sell oil in dollars, ensuring the dollar would be in high demand. Fiat currency is not the real issue at hand, as I've stated many times, if your going to use a currency system fiat is the only way to go. Resource backed currencies always run the risk of the resource being cornered, altering the value of the currency. Our problems with the global financial system are more foundational. Currency creation being held not by the collective, but by private organizations, who than attach interest onto the creation of said currency. This starts the cycle of fiat currency being treated as a commodity. This speculation on what is essentially an accounting tool, distorts the real world purchasing power of the currency. These combine quite nicely with fractional reserve banking, an other distorting effect. Fiat currencies may be many things, legal tender, banknotes, and the like, one thing it is not is money.
There is no way for Greece or any other nation within the EU to fix their economic woes while remaining in the union. What we see taking place across the EU is a direct result of the structural issues of a currency union without a political, and/or a fiscal union accompanying it. The rise of debt amongst the EU nations being shifted to the troika(EU, ECB, IMF) is about centralization of power. Greece was saddled not with economic relief, but loans, and policies that would ensure the loans could never be repaid. All Greece need do is exit the EU, bring back their own currency being printed by the government, not the privately controlled central bank. This would allow them to internally jump start the flagging production, as well as lower the prices on Greek exports. For a real recovery, look to Iceland. For those saying the Greek's entered the debt, and must pay it, is just propaganda silliness. We live within a debt based system, and most of these debts never have any reality other than on paper. Add to that ideas of compounding interest, and debt transfer from private to public, and suddenly they look less and less legitimate.
Jack
aka
PanseyBard
There is no way for Greece or any other nation within the EU to fix their economic woes while remaining in the union. What we see taking place across the EU is a direct result of the structural issues of a currency union without a political, and/or a fiscal union accompanying it. The rise of debt amongst the EU nations being shifted to the troika(EU, ECB, IMF) is about centralization of power. Greece was saddled not with economic relief, but loans, and policies that would ensure the loans could never be repaid. All Greece need do is exit the EU, bring back their own currency being printed by the government, not the privately controlled central bank. This would allow them to internally jump start the flagging production, as well as lower the prices on Greek exports. For a real recovery, look to Iceland. For those saying the Greek's entered the debt, and must pay it, is just propaganda silliness. We live within a debt based system, and most of these debts never have any reality other than on paper. Add to that ideas of compounding interest, and debt transfer from private to public, and suddenly they look less and less legitimate.
Jack
aka
PanseyBard
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